Newsletter. January 2017​--————————————————————--Considering how much influence and impact the world of real estate development has on our lives, it is surprising or ironic that so little is known about it. Even though real estate developers shape many facets of our lives, they cannot be found in the yellow pages, there is no one that issues a licence for this profession or regulates their work, there are no schools or associations that recognise or protect the term “real estate developer”, there is no specific credential required for a person or company to call himself one and until recently there were no universities or schools offering any courses to learn about it. A tiny handful of developers create the world that we live in and we have to live with their decisions and adapt to the world that they create despite the flaws. Wherever you are right now, is probably because of the work of a real estate developer. The few in this profession make decisions that determine where roads, housing subdivisions, shops, schools, parks and other places go, whether a new suburb will be built here now, or over there later. They determine what direction the blocks of land will face, which determines how much shade or sun your house or neighbourhood will have and how much your heating and cooling bill will be. Their decisions determine or impact how long it will take you to walk to the park, to the store, to the closest school, how far away you are to the closest farm or natural food source, what materials your house will be built out of, how much it will cost and what your finance options are.

Sun Villages is part of a very small but growing movement around the world that is making this unknown, almost invisible world of real estate development more apparent and more transparent to the average person. From this vantage point of greater understanding we can be more actively involved in the process of improving things and making better, more liveable new communities. Understanding real estate development firstly takes accepting how little we know, and secondly being willing to find out more. Perhaps it is the complexity of it all that keeps us away. It takes understanding more about how our local, state and federal government works, how our political process works and how our legal and financial world works. It involves learning more about our regulatory bodies and the rules of finance and construction. It comes with a new vocabulary and terms such as zoning, environmental impact studies, geo-technical surveys, return on investment, managed investment scheme, responsible entity, aspect, passive solar placement, to name but a few.

Understanding how real estate development works can appear quite daunting but thankfully there are pioneers that have come before us to help decode this world, make it more accessible and give us a seat at the table. For Sun Villages, the understanding of how it all works came from wanting to find ways it could be done better. It came from wanting to know the answers to questions like: why are so many houses just plonked down in places that don’t make sense - such as where it floods or where bush fires rage or where it's constantly noisy? Why are homes positioned so that they are hot in the summer and cold in the winter when something as simple as intentional passive solar placement could dramatically change this? Why are there so few village design principles being used? In the village there is always a village square, a central open space that people of all ages can enjoy, and which often attracts visitors from all over on a regular, ongoing basis. By comparison, Australian suburbs and the neighbourhoods that make them up are relatively devoid of life and interaction. Why is it that most Australians have to drive everywhere for most of our needs, whereas others can do most of what they need with a short walk or bike ride? Why do we live so far away from a food source so that we are so dependent on transportation? Why is the process of buying a house so complicated and so expensive? In each case the answer seems to be that at one early period in time, the majority of the people of any given locality were involved in the decisions that created their community, whereas now, that process has fallen in the hands of a few. The few with the power and knowledge protect their interests, and often make decisions that benefit their own back-pockets without fully considering the lives of the future occupants of the places they create. When I learned that in the Netherlands, a handful of developers are responsible for creating the vast majority of all homes and structures there, I wasn't surprised to find out that only 11% of the homes there are owned outright without debt. Even though people have been inhabiting the region there for over 250,000 years almost everyone there is still paying off debts for the dwellings they inhabit, with no end in sight. And this situation seems to be trending globally. Wherever one travels to in this world, the promise of owning a home and being able to pass it down to the next generation, as our ancient ancestors once did, is under threat. Debt-free home-ownershjp is becoming increasingly difficult. Obviously real estate developers are not doing much to change this and so we have to take matters into our own hands.

For these reasons and more, Sun Villages has had to reinvent home ownership, the lynchpin of the whole global economic system. We have stripped back real estate development into its original core components and created a new model that puts the average person in the driver’s seat to create a better product and keep more money in his/her pocket. As far as we can see, our model is unique and unparalleled in Australia. We can't find anything better. The management team, that has now grown to 8, is committed to staying in this space and playing a leading role in this evolutionary process of making real estate development more transparent and accessible. We have noticed that as people understand more of what it takes to construct a neighbourhood, not just a house, and why, then they are more willing to actively help make it happen.

The new developments for Sun Villages are around finance. Lauren and Gretchen each came to Sun Villages separately for an ethical investment and for a place to live. They joined the management team and their combined life’s experience in the finance and investment world have proven invaluable to help us through the next phase.

Until next timeDavid

When will construction commence? At the previous management team meeting we set the goal for raising construction funds by September of this year so that construction can begin by December. The finance needs to be in (or promisingly close) by September as it will take approximately 3 months for the approval of our modified Development Application (DA) with local council.Managed Investment Scheme (MIS)It was determined that in order to reach these above goals of starting construction in December, we need to establish a Managed Investment Scheme (MIS) and a Unit Trust by the end of April. Gretchen who is a qualified accountant with lots of relevant experience, and a Sun Villages investor who also wants to be a resident with us, is guiding us through this process. Why MIS?Previously we were restricted to raising construction funds from “sophisticated investors” under the "20/12 rule" of the Corporations Act 2001, section 708. With Gretchen’s and Lauren’s help we have discovered that by setting up a managed investment scheme, we can raise funds from anyone and everyone including the general public. The MIS will open up our marketing and advertising opportunities to include financial advisors who assist people to invest their money and super funds.The steps towards this goal include:-Putting together an information memorandum (IM) outlining the Sun Village concept and financial model. -Using this IM document to find the right Responsible Entity (RE) -which is a necessary experiential qualification.-Working with the chosen RE to set up a MIS and the required Product Disclosure Statement. (PDS) Once we have all this we can actively start marketing Sun Village. Lauren and Gretchen will draw on their 60+ years of combined experience in the financial planning and investment world to take our product to market and find the investors to fund our construction phase. In parallel to this we will be advertising to find the remainder of the residents. Unit TrustWe will also set up a unit trust and the shares in Sun Village Company will be sold/transferred to the Unit Trust so that we can have the advantages of operating under a Unit Trust. There is no stamp duty on the transfer of shares. There will be 2 classes of share-unit holders; investor/tenant and pure investor. The advantage of the Unit Trust over company shares in that the depreciation of the building and fixtures and fittings can be passed onto investors and this will significantly reduce the tax paid on their investment earnings. Also when an investor sells their unit shares, 50% is capital gains tax-free under current legislation. A registry for investors and investor residents to buy/sell their share-units.We discussed creating an online registry where Sun Villages' investors and future residents can buy and sell their shares in this and all future Sun Villages projects. In the meantime and until we have that in place we agreed we should help facilitate the process of anyone that wants to sell their shares at any time from now, by making them available to new investors that want to buy in.

Thank you David.To add to that if I may, the book – A pattern Language – has been the bible of design for Sun Villages and this book has been created for the layman as well as any professional who really wants to build on the shoulders of giants -some very penetrating minds. It took 10 architects 10 years to travel the world and look at what was working and why it worked – what its relationship was to all other related patterns. Past experiences showed us that some professionals give it more lip service than actually use it! For Sun Villages, the awareness and understanding of how best our lives can be, all came from this book – it was triggered by permaculture but this book incorporated that and more – so much is based on commonsense, rather than money as it is today. The first Sun Villages first group - 13 of us in 1982 - took a year to go through this book and pick out the patterns we wanted to incorporate into our lives. We wanted a social quality of life as well as a home that offered physical comfort, in an area that was close to public transport and open land. I sincerely wish to thank those who had enough vision and social commitment to put in the money to financially launch Sun Villages as a public company. Your money is safer than being in a bank and the return still greater than is found in most passive ports. I also wish to thank our fabulous team of 8 that is so committed to seeing this through, that they are prepared to delay financial rewards until the completion of the project – now that is commitment! Love and LightStina